From the archive: Are think tanks just lobbyists in disguise?

Washington D.C. – the world capital of lobbying – polices its think tanks much more than we do here. This needs to change.

To illustrate:

At the end of last month, Democratic Senator Elizabeth Warren, the scourge of Wall Street, accused Robert Litan, an economist at the Brookings Institution, of publishing “highly compensated and editorially compromised work on behalf of an industry player seeking a specific conclusion.” Litan quickly resigned from Brookings.

The Brookings Institution is one of the largest and most well-established think tanks in the world, and is generally regarded as ‘liberal’ or ‘centrist’, though like most think tanks it likes to describe itself as strictly ‘nonpartisan’. In July, Litan had testified before a Senate hearing on a plan by the US Department of Labor to regulate brokers who offer retirement advice. The proposal is strongly opposed by Wall Street, and Litan’s study concluded that the plan could ‘harm consumers’. Although Litan represented himself (accurately) as a fellow at Brookings, his study was funded by Capital Group, an investment firm, through his private consulting firm.

Litan had disclosed the funding for the study, but in a series of follow-up questions Warren sent to Litan after the hearing, she said that he also admitted that Capital Group also provided feedback and editorial comments on a draft. Warren sent the president of Brookings a letter demanding to know more about the think tank’s policies on conflicts of interest (or, it would be more accurate to say, confluences of interest).

This is not the first time that Senator Warren has questioned the role of think tanks; in 2013 she called on major financial sector donors to disclose their payments to think tanks (indeed, other US commentators have suggested that all donors should).

Rupert Murdoch’s Wall Street Journal, among other right-wing media, has repeatedly criticised Warren and tried to turn the incident into a broader characterisation of the left (‘liberals’ in American parlance) for ‘silencing critics’. Meanwhile, the Brookings Institution has countered that it accepted Litan’s resignation because he had testified in the hearing as a (non-resident) Brookings fellow but had relied on a report that was produced by him as a private contractor. In short, Litan had broken Brookings’ rules.

What the incident underlines is how strenuously US think tanks protect their ‘nonpartisan’ status, including that they don’t engage in lobbying. Even though the reality is murkier than this – many think tanks are clearly partisan, for example – not being seen to act as lobbyists is critical to think tanks’ charitable status (501(c)(3) – the tax status accorded most think tanks). The way that a number of American think tanks get round this is to have supposedly independent lobbying arms – for example the Heritage Foundation (right-ring) has Heritage Action for America, and the Center for American Progress (left-wing) has the Center for American Progress Action Fund (these tend to be 501(c)(4) organisations, which means they can conceal their sources of money).

In the UK, think tanks haven’t felt any need to establish such ‘affiliate’ bodies, indeed our think tanks appear to emphasise their claim to be ‘politically unaffiliated’ more than they deny that they are lobbying organisations. This probably reflects the relatively lower profile of lobbying compared to the US, the smaller size of UK think tanks (in the US, think tanks are a billion dollar business), but also the comparatively lax regulation of our think tank ‘industry’.

The source of this analysis,Transparify(a US-based independent research organisation) has recently suggested that this may be changing:‘UK think tanks reveal who funds them as sector embraces transparency’. Not so fast though, because this is only what Transparify hopes will be the case when it publishes an updated review, on the basis of that nine think tanks have told the organisation that they plan to add additional information about donors to their websites ‘soon’ (Transparify will be rating more than 20 British think tanks in November, so watch this space).

At the moment, as Transparify notes, when it conducted a preliminary assessment of the think tanks it will be adding to its study, they were even worse than its existing cohort: of 27 leading UK thinks tanks, only one (IPPR) was deemed ‘transparent’, while thirteen were deemed ‘highly opaque’.

Transparify’s ‘gold standard’ for transparency is surely what we should expect of all think tanks: that they publish not only the names of their donors, but also the exact amount given by each funder and the specific research project or other purpose each contribution was used for.

As the excellent on think tanks website suggests, accepting donor money does not equate to abandoning intellectual independence or compromising integrity; the rent has to be paid somehow, and government and other organisations need research and analysis. Rather, that: “…those think tanks that continue to take money behind closed doors …are the real cause of concern.”

Talking of which, the Institute of Economic Affairs – to focus on one of the most ‘highly opaque’ UK think tanks – recently published a report which suggested that revenues from alcohol taxation in England far outweighed the economic cost of drinking to society (including to the NHS, police, criminal justice system and welfare system). Of course, this shouldn’t mean that we should reject sensible attempts to reduce these costs. But the report’s author, Christopher Snowdon (Director of Lifestyle Economics at the IEA) has, how shall we put it, form in defending unhealthy corporate interests. The title of his publications gives a reasonable flavour: The Spirit Level Delusion, The Proof of the Pudding (versus ‘fat taxes’) The Crack Cocaine of Gambling (against regulating fixed-odds betting terminals), and The Fat Lie. Snowden has previously recommended that all alcohol duties in the UK should have halved to make them ‘less regressive’ (in his Aggressively Regressive: The ‘sin taxes’ that make the poor poorer).

The problem is of course that Snowdon regularly appears on television and writes for newspapers and magazines, as well as speaking at events by industry-funded groups, without revealing who’s paying for his work (he claims not to know, and/or that it is ‘irrelevant’). Not even curious?

Snowdon also spoke at a fringe event at the Tory Party conference on (you really couldn’t make it up) ‘Sock puppets: Should the state be funding pressure groups?’, which included Daniel Hannan MEP. This issue – charities receiving public money – has a been a bit of a campaign for the IEA against what it regards as ‘political’ charities. In November 2012, Snowdon appeared before Public Administration Select Committee in Parliament which was looking into the current rules on political campaigning by charities. Explaining that the IEA is a charity purely for the tax breaks, he claimed again that he has “…no idea who we are funded by”, and resisted the notion that the financial benefits of charitable status was equivalent to being given money by the state (and so equivalent to the ‘sock puppets’ he criticises). At last year’s Tory conference, he was on the panel at another IEA event titled ‘Give commercials a break: is advertising over-regulated?’, sponsored by the Advertising Association no less, which was chaired by John Whittingdale MP (now Secretary of State for Culture, Media and Sport of course) and which also included John Redwood MP. Other IEA representatives have also met with government ministers.

Are these examples of ‘lobbying’? To contrast the situation in the US and UK, hasn’t Snowdon done the same thing as Litan – worse actually, because at least Litan was open about who had funded the work he was citing in his evidence? And shouldn’t all UK think tanks act with the integrity of the Brookings Institution, or be called to account by policymakers for their lack of, well, accountability?

Of course, without greater transparency we just have to take it on trust that no UK think tank would ever publish, pace Elizabeth Warren, “highly compensated and editorially compromised work on behalf of an industry player seeking a specific conclusion.” Since as Christopher Snowdon stated, in his evidence before Parliament in 2012: “…the only exceptions from charitable status should be party politics and blatant industrial lobbying.”